San Francisco Mayor Suggests Tearing Down Shuttered Downtown Retailers

San Fransisco Mayor London Breed recently proposed a new plan to reinvigorate the city’s struggling downtown by tearing down abandoned retail space and replacing them with enticing new buildings. 

San Fransisco was hit hard in recent years. The cost of living in the city is reportedly 79% higher than the national average, homelessness has risen 35% since 2019 and the median home price is $1.325 million. Twenty retailers near the city’s Union Square have shuttered their doors since 2020, according to the San Fransisco Standard. 

“We can't completely rely on retail in downtown and restricting what happens in downtown anymore,” Breed said at Bloomberg’s Technology Summit on Thursday.

The San Fransisco Westfield Mall was included on Breed’s shortlist. The commercial real-estate conglomerate, which has been operating the mall for over two decades, began ceding control of the mall in June.

The company cited “the challenging operating conditions in downtown San Fransisco, which have led to declines in sales, occupancy and foot traffic,” according to a statement in June.

Breed floated the idea of tearing down structures — including the mall — and replacing them with something that would bring back pre-COVID-19 pandemic foot traffic.

“You can convert certain spaces. A Westfield Mall could become something completely different than what it currently is,” Breed said. “We can even tear down the whole building and build a whole new soccer stadium. We can create lab space or look at it as another company in some other capacity.” 

Less than two weeks before Westfield’s operators announced it would be cutting its ties, the owner of the largest hotel in the city stopped paying its $725 million debt.

Real estate investment firm Park Hotels & Resorts, which owns the Hilton San Fransico Union Square and Parc 55 hotels, cited its desire to “materially reduce our current exposure to the San Francisco market.”

The firm added that it is leaving primarily because of concerns over street conditions and office vacancy rates.

Office vacancies in the city have reached a 30-year-high, according to CNN.

In February, the city released a “Roadmap to Downtown San Fransisco’s Future,” which focused on initiatives to rebuild the city. The plan featured proposals to designate an Arts, Culture and Entertainment Zone, improve transportation downtown and delay a 50% tax increase this year.

“Would I like for everyone to come back to the office five days a week? Of course, I would. But is that going to happen? Probably not," Breed said Thursday.

"So, let’s make some adjustments to do everything we can to reimagine what parts of San Francisco can be."